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Omnichannel: the key to customer loyalty

By : Martin Shires

April 28, 2015 08:30 AM

Banks have traditionally been sticky - customers don’t tend to leave them all that often. But it’s now quicker and easier to switch banks. There’s a lot more information for consumers, and people have been empowered by the internet and social media. For banks, standing still and just expecting customers to stick around is no longer an option. Consumers are prepared to jump ship far more readily, as evidenced by a recent international study showing more than one-third of customers bought a product from a competitor bank. “Hidden defection of customers from their primary bank is rampant,” said Bain & Company in its Customer Loyalty in Retail Banking report. So how do you improve customer loyalty and ensure you are not losing valuable business? According to the Bain & Company study, it’s all about delivering a joined-up omnichannel experience. Firstly, banks must recognize that digital is massive. In 18 of the 22 countries surveyed, customers carried out more than 50 percent of banking transactions through digital channels. Mobile is now the most-used banking channel in 13 countries and accounts for almost one-third of all interactions worldwide. But of course the traditional means of banking are still crucial. For example, the report noted that more than half of all customers around the world use both digital and physical channels. What’s really interesting is that these omnichannel customers gave their banks a Net Promoter Score (NPS) that was 16 percentage points higher than customers using digital only channels and 22 points above those who rely on physical contact entirely. Moreover, this NPS was even higher for omnichannel customers who had more interactions. “The payoff is higher product ownership,” the report explains. “Omnichannel customers held an average of 1.0 more product with their primary bank than digital-only customers and 1.3 more than branch-only customers.” “While the data doesn’t prove a linear cause-and-effect relationship, it shows a virtuous circle of greater engagement across channels, greater loyalty and increased product holdings.” North American Banks are increasingly seeing a big rise in NPS scores in the last four years thanks to digital innovations such as sending fraud alert texts to customers at the point of sale and deploying ATMs that allow customers to open accounts or hold video conferences with expert staff. Financial institutions want to transform their business models to drive greater profitability, while unlocking better and better customer experiences, and the secure integration of their physical and digital channels is the key. Check out other NCR Financial Services solutions on www.ncr.com.

Martin Shires

New Branch Solutions Mkt Mgr, Strategy & Marketing

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Martin Shires is a global evangelist for branch transformation strategy, based out of NCR’s R&D center in Dundee, UK. Martin has held a number of senior regional management roles in European retail banking.